What is the imprest system?

The imprest system is definitely an accounting system for spending and subsequently replenishing petty cash. Petty cash is usually a small reserve regarding cash kept on-site at the business location intended for incidental cash wants. The imprest system is made to provide a rudimentary manual means for tracking petty money balances and how cash has been used.


The essential top features of an imprest technique are:

  • A fixed amount of cash is billed to a petty cash fund, which is stated in a divide account in the general ledger.
  • All cash distributions from the petty cash fund are acknowledged with receipts.
  • Petty cash disbursement receipts are used as the basis for periodic replenishments of the petty cash fund.
  • Variances between expected and actual fund balances are frequently reviewed and investigated.


In reality, expenses are identified when new cash replenishments are made to the petty cash fund from your company checking accounts. When cash is paid from your checking account, the entry is a debit to the many expenses for which receipts are now being supplied by your petty cash custodian, and also a credit to the cash account.

Unless the volume of cash assigned to the petty cash fund is deliberately improved, there is no reason there should actually be another entry into your account used to document the petty cash balance, since all petty cash replenishments are coming from the company checking accounts.

The key feature of it is the call to document all expenditures. Doing so is a superb way to maintain a higher level of management over cash fees.

The imprest system is declining throughout popularity, since many businesses choose to use company cards for incidental acquisitions, or have workers pay cash and apply for reimbursement with the corporate expense payment system. Also, the imprest system can cause cash leakage from a business, either through theft with the cash or as the petty cash custodian does not do a right job of saving disbursements.